From Russ Fox, E.A., of Clayton Financial and Tax of Las Vegas, Nevada. All of the items below are for information only and are not meant as tax advice. Please consult your own tax advisor to see how each item impacts your own situation.

Archive for the ‘Florida’ Category

My partner, Aaron, has a Toyota Prius (actually, two of them, if you count his wife’s car). I like the car a lot, and I’m certain Aaron won’t misplace his car. Aaron, though, does not manage the vehicle fleet of Miami-Dade County (Florida). That city/county managed to “misplace” 293 Toyota Priuses.

My understanding is that we can’t take it with you: Our worldly possessions won’t be with us in the hereafter. One Florida man believes he is already a resident there, and is thus exempt from trivialities such as the income tax. The results are what you might expect.

[C]orruptly tried to obstruct and impede the IRS in performing its duties by sending a series of letters claiming that he was not a taxpayer, that he was an American National but not residing in Washington, D.C., that he was not subject to the tax laws, and by threatening individual IRS officers with lawsuits against them.

Mr. Gentile is correct that he is an American but not residing in Washington, DC. What the press release doesn’t tell you is where he thinks he resides: The Kingdom of Heaven.

Of course, I could add that Mr. Gentile’s threats are an especially good way to be sure that his case is referred to Criminal Investigations. I could also add that the idea that only citizens of Washington, DC are subject to the US income tax is as useful as a $3 bill.

Mr. Gentile is looking at another hearing in February. If he continues down the road of allegedly threatening federal officials and not paying income tax, he will likely soon be residing at ClubFed.

Let’s assume you talk to your attorney, and he advises you that you should create a reserve fund for taxes. Usually, it’s a good idea to listen to your attorney. If you don’t like his opinion, perhaps get a second opinion.

Of course, there’s also the Bozo method. The Miccosukee Tribe runs a successful casino near Miami, Florida. The tribe is exempt from taxes (it’s a sovereign nation). However, its members must pay taxes. They decided that they knew better than their attorney, and didn’t report distributions to its members or create a reserve fund in case their opinion was wrong. The Miccosukees filed a malpractice suit against their longtime attorney in a Florida court. The attorney had copies of his advice which pretty much (to this layman’s eyes) throws the malpractice case in the trash can.

Taxdood has more. Hint: The Miccosukee Tribe is the first nominee for the Bozo Tax Offender of the Year.

I am concerned that more than eight months after Congress passed a measure to crack down on tax fraud by prison inmates at state correctional institutions, the Internal Revenue Service and Florida Department of Corrections have yet to reach an information-sharing agreement that will help state prison officials identify prisoners filing false tax returns.

While the IRS’ public response is that they are working hard on the problem, one fraud ring in a Key West jail was stopped only because, according to the Florida Sun-Sentinel, “…one of [the inmates] left a how-to note in his cell.”

Most of the time, criminals don’t stoop to that level of Bozo behavior. Senator Nelson and other Senators wrote IRS Commissioner Douglas Shulman complaining about the laxness of IRS efforts in stopping this fraud. In Florida, it will be the state corrections officials who will be doing some of the stopping; soon, all envelopes containing tax returns that will be filed from Florida prisons will be stamped with a notation noting that it came from an inmate. Hopefully, the IRS will read that.

Of course, tax professionals see the IRS’ efforts in making sure that every tax professional gets a license, and that continuing education programs are under an electron microscope for their curricula. Perhaps the IRS should look at utilizing some resources on prisoner fraud as it is costing the government and taxpayers money.

The City of Miami has had financial difficulties, and faced a large budget deficit. The economy in South Florida isn’t doing well, so raising taxes would be a last resort, right?

Of course not–it’s the first choice. Mayor Carlos Alvarez proposed a 14% property tax increase, and Dade County Commissioners approved the increase (Miami and Dade County share government). Voters were not amused.

The real villain in South Florida (and in California) are wages for public employees. I’ve said this before, but it bears repeating. When I was growing up, public employees didn’t make a lot of money but did have generous benefits and pensions (pension relative to their salaries). Today, many (most?) public employees make better salaries than comparable employees in private industries, have better pension, and better benefits. That’s not sustainable, and there’s no way this can continue–in South Florida or in California.

Jerry Brown is basically saying the same message as Mayor Alvarez did: Either raise taxes or I’ll have to cut what the state (of California) does. There’s an alternate solution, but that’s not what his constituency wants, and that’s to cut pay and benefits for state employees.

The Florida Marlins play at Joe RobbiePro Player Dolphins Stadium in South Florida. It’s a football stadium, and with the usual afternoon showers that plague South Florida it’s not an ideal place for baseball. Add in the heat and humidity of South Florida and it’s no wonder the Marlins are near the bottom in attendance.